An Independent Contractor Agreement is a contract letter that declares the terms of the working arrangement between the contractor and the customer; this includes the services that are going to be provided, the terms, and the length of the service or the project, payment terms, and concealment, non-solicitation, and disagreement resolution sections.
This agreement rules the relationship between an independent contractor and a client. There are provisions that may require to be changed suitable for local law. An independent contractor agreement template favors the client and has to be edited in order to replicate the essentials of the deal for which it’s used. In an independent contractor agreement, you are able to write terms to stop a freelancer from revealing particular details about your business or service. There are also terms regarding the non-solicitation and non-competition if ever there are conflicts of interests in the business or a threat of competition.
An independent contractor agreement has to include the following:
Step1Declaration of Relationship
This is an important part of the independent contractor agreement as it describes the relationship of the independent contractor to the client hiring him.
Step2Duties, Contract Terms and Acknowledgements
Together with a description of the job or service provided by the independent contractor, both parties should agree on how the job or service will be done. The agreement may specify the exact date of the when is the project will be done, where it will be done, and how will be process will be done.
Step3Payment Terms
The independent contractor agreement has to specify the terms for paying the independent contractor, like flat rate or an hourly rate, by direct deposit or by check. It also has to indicate when the contractor will get payment like when the work is completed or partially pay in advance and pay the remaining balance upon completion of the job or the project. The agreement has to include the information about who’s accountable for the cost of the supplies and materials needed, remarking costs that the hiring client has reimburse.
Step4Protections and Enforceability
An independent contractor agreement normally includes key elements that offer guarantees and legal protections, normally for the hiring client. Provisions normally disallow conflict of interest and task of rights relating to the contractor without the approval of the client. The agreement normally obliges the contractor to keep confidentiality and obey the provisions for adjudication and for modifying or dismissing the agreement.
Step1
Define the relationship of the contractor with your client. Defining the intentions when hiring a contractor would be the first step in creating an independent contractor agreement.
Step2
Define the scope of work of the project. This is helpful in clarifying any possible confusion regarding what’s expected from the freelancer.
Step3
Clear up the amount you the independent contractor is going to earn from the project. Define the total amount for the job and when the client is going to pay for the job done.
Step4
Describe the project timeframe. Specify when the work starts and when it is expected to be done.
Step5
Describe the project timeframe. Specify when the work starts and when it is expected to be done.
Step6
Tell the freelancer that tax payments aren’t client’s responsibility. Freelancers always pay their own revenue and service taxes straight to the government.
1
Government tax agencies warily screen the freelancer’s relationships with the client in order to make sure that the employment laws aren’t being broken. Be cautious when selecting the use of words for the independent contractor agreement in order to avoid additional inspection by taxation representatives. For instance, describe clearly that the contractor isn’t an employee and wouldn’t obtain employee benefits like sick time.
2
Classification is very important. It is very essential to classify the workers as contractors for tax purposes. Failing to see this can cause trouble with the independent contract agreement. Make sure that you correctly classify the worker as a freelancer and plan some key factors that point to an independent relationship in writing.
3
Scope of work has to be plainly defined. The job that the freelancer will do for the client has to be narrowed to a particular scope, in order to correctly distinguish them from a contractor. This provision has therefore needed to include a portrayal of the work and services that the freelancer will render for the client.
4
Being specific with the payment is necessary. Payment information has to be clearly specified within the agreement. While payment by the hour, week, or month normally specifies that a worker is an employee, payment that is made derived from a certain job, project, or that is derived from a straight directive tends to be more common in terms of independent contractors.
Ask the Community
Still get confused or have more suggestions? Leave your thoughts to Community Center and we will reply within 24 hours.